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Drag racing hits speed bump

Pending $121-million deal falls through, leaving NHRA's financial status up in the air. Racing begins today at Pomona.

February 07, 2008|Greg Johnson | Times Staff Writer

It will be business as usual at the L.A. County Fairgrounds in Pomona today when the National Hot Rod Assn. opens its 2008 season with the annual Winternationals, which run through Sunday. Engines will roar, fat tires will lay down bands of rubber and cars will speed down the drag strip at upward of 300 mph.

Off the track, however, the pro drag racing circuit hit an unexpected speed bump Jan. 31 when a pending $121-million deal that had been pitched as integral to the future of both professional drag racing and its amateur counterpart fell apart.

"I felt like someone punched me in the stomach," NHRA driver Ron Capps said shortly after shareholders of HD Partners Acquisition Corp. rejected the deal. HD Partners executives did not comment on the failed deal. The Santa Monica company would have paid $121 million for NHRA's Glendora headquarters building, four race tracks and its Powerade Drag Racing Series. NHRA planned to use the money to finance its popular amateur racing program, and HD Partners hoped to run the Powerade series as a for-profit business.

Some drag racing industry insiders believe that the deal fell apart because of the troubled financial markets. Others suspect that savvy investors were leery of investing in a lesser-known racing circuit that lagged far behind the popular NASCAR series.

"I think the real bean counters on Wall Street looked at [HD Partners] and said, 'What are you thinking?' " said Jeff Burk, publisher of DragRacingOnline.com. "I think they started to wonder, 'Where's the pot of gold at the end of the rainbow?' "

Longtime drivers and team owners were stunned last May when NHRA announced plans to sell most of its assets, including its pro racing circuit. "In years past, the NHRA said that selling anything was pretty much a closed issue," said longtime racer and team owner Don Prudhomme. "Then, lo and behold, someone figured out how to sell it."

Immediately after the sale fell apart, NHRA President Tom Compton said that the season would go on as planned on the nation's drag strips. But drivers, owners and crew chiefs in the tight-knit drag-racing community already are speculating about a possible bid by drag strip owner Bruton Smith.

Within hours of the HD Partners vote, Smith was on record as saying: "I always consider myself to be in a buying mood, and the NHRA is certainly an attractive property, but right now my focus is on building the world's premiere drag racing facility in Charlotte."

NHRA founder Wally Parks, who died in October, started the association in 1951 to help stop the carnage created by illegal street racing, and it evolved into a financial machine.

The amateur Sportsman class that Parks long championed now claims 80,000 card-carrying members who put pedal to metal at NHRA-sanctioned tracks.

But what interested HD Partners was the pro circuit that generates about $100 million in annual revenue from ticket sales, corporate sponsorships and television rights.

Most of that cash traditionally has flowed back into the NHRA to subsidize amateur racing, and during four-day NHRA race meets, amateur contests are sandwiched in with the professional races. HD Partners Chairman Eddy Hartenstein, who earlier founded DirecTV, believed that pro drag racing could grow more profitable if it were free of restrictions created by NHRA's nonprofit status.

The nonprofit status has frustrated some pro racers who believe that the arrangement has limited the pro circuit.

"I thought the idea of separating the professional categories and placing the emphasis on the pros was key, because those are the marquee classes and what the fans come to see," said driver Rod Fuller. "You don't go to a Major League Baseball game and watch a triple-A game before it."

By two important measures, NHRA's pro circuit considerably lags motor sports leader NASCAR.

The last-place NASCAR driver at the 2007 Auto Club 500 in Fontana earned $86,963; winners of the biggest NHRA races take home only about $40,000. NASCAR is in the middle of an eight-year, $4.4-billion media rights deal, while NHRA events are televised on a delayed basis on ESPN2.

In addition to being dangerous, drag racing also is expensive.

Some team owners spend more than $3 million during a single season to keep cars, drivers and crews going. The base pay for drivers fortunate enough to sign with a well-funded team can top $300,000, not including side deals with corporate sponsors.

But ever-increasing costs haven't dulled the appeal of pro drag racing.

"If we announced tomorrow that we had a new race car coming out and needed a driver and crew chief, we'd have 30 to 35 applications on the driver side," said team owner David Powers.

"And the same would go for every other position in the crew."

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greg.johnson@latimes.com

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